GS YUASA Our CSR management, in which we seek to

42

GS YUASA REPORT 2017CSR

“Innovation and Growth,” our corporate philosophy, is the basis of the GS Yuasa Group’s CSR. By reforming our business processes and by developing new technologies that go beyond a traditional approach, we aim to generate innovation, and as a result, drive growth by expanding earnings and contributing to people, society and the global environment.

This is the basis of our CSR. Further, we aim to be a company that earns the long-term trust of society and becomes one that society wants to stay operating into the future and that responds quickly, via our main business, to worldwide social issues as well as the needs and expectations of stakeholders.

Over the years, we have acted based on an awareness of our social responsibility in line with corporate rules such as our Corporate Ethical Behavior Guidelines. Given the expectations of the international community for companies, however, the GS Yuasa Group in Japan has started to undertake global CSR initiatives. We created a CSR promotion structure led by the CSR Committee, which was established through participation of members from respective divisions in November 2016. Then, in May 2017 we formulated a CSR Policy and Code of Conduct as the foundations for our CSR activities and disseminated these internally. In response to our CSR issues, we identified key CSR challenges in relation to the Mid-Term Management Plan. During this fiscal year, we will formulate an action plan and KPIs (key performance indicators) for these important

challenges and will make improvements by running a PDCA (plan-do-check-act) cycle. In addition, we intend to write CSR procurement guidelines for the Group’s supply chain and promote sustainable purchasing.

The GS Yuasa Group is planning medium- to long-term CSR initiatives as follows and has set targets for fiscal 2019 that incorporate these CSR challenges into the business strategy.

GS Yuasa Group’s CSR

Initiatives for the Fiscal 2017

Medium- to Long-Term Initiatives

Our CSR management, in which we seek to contribute to a sustainable society and ensure long-term commerce, forms an integral part of our aim to realize our corporate philosophy.

CSR Promotion Framework

Phase Period Target

First stage FY 2016–2017Create processes to deal with the CSR challenges in relation to our business strategy (Fourth Mid-Term Management Plan)

Second stage FY 2018Analyze and evaluate our performance using these processes and then make improvements

Third stage FY 2019Establish business processes that incorporate CSR challenges into our business strategy (Fifth Mid-Term Management Plan)

Board of Directors

President

Business divisions, Group companies

CSR Committee(Chair: Officer in charge of CSR)

CSR Activities

43 44

Besides legal compliance, we respect international norms, guidelines, and initiatives related to social responsibility, work on sustainable development of our business through developing energy storage technologies, and contribute to people, society, and global environment.

Developing fair, transparent, and sound business, and anti-corruptionGS YUASA conducts a transparent business policy which aims to earn the trust of customers, business partners, shareholders, and of local communities as a top priority. And to adhere to laws and regulations of each country and region. Furthermore, we address to prevent any kind of corruption, will not tolerate any illegal political contribution, bribery of public officials, and will not have relationships with personnel or organizations of organised crime.

1-1 Compliance 1-2 Elimination of mixing up official business with personal affairs 1-3 Fair, Transparent and free competition and trade 1-4 Management of confidential information 1-5 Respect for intellectual property 1-6 Separation from organized crime 1-7 Transparency of information disclosure 1-8 Legal compliance for political funds control 1-9 Prohibition to offer entertainment or gifts to public employee 1-10 Sound relationship with business partners

Respect for human rightsGS YUASA will respect all human rights and labor rights, and will not tolerate any forced labor or child labor. Diversity will be respected, without any discrimination being tolerated.

2-1 Prohibition of discrimination and respect for diversity 2-2 Respect for individual personality 2-3 Respect for labor rights 2-4 Prohibition of forced labor and child labor 2-5 Avoidance of complicity in human rights abuse

Conservation and improvement of adequate working environmentGS YUASA will provide safe and comfortable working environments for employees. Proper management will be provided in order to promote mid to long-term development of human resources.

3-1 Conservation and improvement of safety and health in working environments 3-2 Ensuring appropriate working hours, securing minimum wages and prohibiting unreasonable wage reduction 3-3 Mid to long-term human resources development and appropriate ability assessment 3-4 Respect for individual work-life balance 3-5 Offer of equal employment and working opportunities

Fulfillment of our responsibilities to provide safe and secure products and servicesGS YUASA ensures the safety and quality of products/services to the end of their lifecycle throughout manufacturing. Furthermore, GS YUASA honest provides clear safety information for all products/services.

4-1 Focus on safety and quality 4-2 Making Safety Information accessible 4-3 Solutions in case of Product accidents

Global environmental conservationGS YUASA addresses to prevent pollution , and to mitigate climate change, and to establish a sound material-cycle society through using sustainable resources.

5-1 Promoting environmental protection 5-2 Providing environmental considerations products

Building better relationships with local communitiesGS YUASA will contribute to sound and sustainable development of local communities through building better relationships with their local communities.

6-1 Contribution to sustainable development of communities 6-2 Adoption of local human resources

Ensuring social responsibility within our supply chainGS YUASA will promote actions to ensure social responsibility within our supply chain.

7-1 CSR procurement promotion


GS YUASA CSR Policy

Code of Conduct

Code of Conduct

Code of Conduct

Code of Conduct

Code of Conduct

Code of Conduct

Code of Conduct

1

2

3

4

5

6

7

Step 1: Identify risk and opportunity in CSR

Step 3: Specify materiality

Step 2: Specify significant risk and opportunity in CSR

To reflect CSR challenges in our business strategy, the GS Yuasa Group analyzes and assesses the impact on business and the impact of our business on society and then clarifies

the Group’s materiality for items that need to be addressed. Next, we will explain the materiality specification process that we implemented fiscal year under review and the results.

For key challenges in the Mid-Term Management Plan, GS Yuasa identifies risk in CSR (that hinders the resolution of these challenges) and opportunity in CSR (that promotes the resolution of the challenges). When identifying these risks and opportunities, our actions are based on international guidelines related to CSR.

GS Yuasa orders the core CSR risks and opportunities evaluated in Step 2 and then specifies materiality in consideration of the response method to the risks and opportunities.

Going forward, we will formulate an action plan and key performance indicators (KPIs) relative to the materiality we have specified and look to make improvements via a PDCA cycle. In addition, we will clarify the correlation between materiality and sustainable development goals (SDGs).

GS Yuasa evaluates and assigns a score to the scale of the CSR risk and opportunity identified in Step 1 in consideration of the impact on business (possibility of occurrence x scale of impact on business), which enables us to specify risks and opportunities as key business challenges. Next, we evaluate the impact of GS Yuasa’s business activities on society relative to these core business risks and opportunities based on the number of related CSR themes and social importance. We then specify risks and opportunities that will be key CSR domains.

Materiality (Key CSR Challenges)

Materiality Specification Process

Results of Specifications

CSR Policy Materiality CSR Policy Materiality

1. Developing fair, transparent, and sound business, and anti- corruption

Thoroughly fulfilling our CSR and ensuring compliance

4. Fulfillment of our responsibilities to provide safe and secure products and services

Provision of high-quality productsManagement of confidential

information

Respect for intellectual property5. Global environmental conservation

Promoting environmental protection

2. Respect for human rights Respect for individualityDeveloping and popularizing environmentally considered products

3. Conservation and preservation of adequate working environment

Improvement of safety and health in working environments 7. Ensuring social

responsibility within our supply chain

CSR procurement promotion

Human resources development

Imp

act

on

soci

ety

Impact on business

Key CSR domains

The GS YUASA CSR Policy and Code of Conduct* formulated in May 2017 are based on the President’s Policy and have become the foundation of the Group’s CSR. In the GS Yuasa Group, all employees understand that CSR activities are

business activities and we encourage everyone to take part based on our CSR Policy and Code of Conduct in order to ensure the sustainable development of society and business.

CSR Policy and Code of Conduct

*Our CSR Policy and Code of Conduct are available on our website: http://www.gs-yuasa.com/en/csr/policy_e.php

Matrix of key CSR domains

CSR Activities

45 46

As a trusted manufacturer, GS Yuasa is constantly working to improve customer satisfaction and ensure safety.


GS YUASA is committed to a diligent study of ‘Monozukuri,’ customer first thinking and the improvement of products and service for the realization of our Corporate Philosophy.

To remain a manufacturer trusted by customers at all times, the GS Yuasa Group approaches manufacturing activities from the customer’s perspective and works relentlessly to improve the quality of products and services. To maintain this trust, we formulated, under the leadership of top management, the GS Yuasa Quality Management System based on the ISO 9001 standard and are promoting a quality management system that crosses business divisions. The quality of our products and services is discussed company-wide every month by the Quality Management Committee, which is chaired by a director (the executive officer in charge of quality), to enable us to respond swiftly to any change. President Osamu Murao was the chairman of this committee in fiscal 2016. As part of our approach to manufacturing, we provide quality-related education courses to all employees and promote kaizen (improvement) team activities company-wide as a way to bolster the awareness of quality among employees and to boost their understanding and skills related to quality control. Our aim here is to always enhance the quality of our products and services.

Ensuring the safety of GS Yuasa Group’s products has been positioned as a critical challenge because our products store, control and convert electrical energy. The Product Safety Management Committee is responsible for guaranteeing the safety of our products across the board. We promote developments in business divisions after assessing conformity with product safety standards as well as the safety of products as they are used, age and deteriorate. For this reason, we are strengthening our product testing procedures using failure

mode and effect analysis (FMEA) and fault tree analysis (FTA). In addition, we constantly gather information on issues with product safety and provide this to top management without delay as part of a system that we have established and are operating to ensure a swift response. Moving ahead, we aim to become a company supported by trust and quality by developing human resources capable of providing guidance on quality engineering and product safety, while internally and proactively disclosing information on product safety.

The GS Yuasa Group educates employees about quality to instill a “culture of quality” throughout the organization based on our Basic Quality Policy. The education is systemized. The level of quality control and type and rank of their job are considered so that employees can be taught based on the type of their work and their experience. Basic quality-related education has been compulsory for all new recruits since fiscal 2008 and their knowledge of quality control (QC) is tested with the QC examination. 191 passed from grade

one to four in fiscal 2016 with a cumulative total of 1,805 people passing the exam company-wide up to fiscal 2016. GS Yuasa will continue to position the raising of quality-related awareness and the attainment of knowledge as important issues going forward.

The GS Yuasa Group values the opinions, recommendations and complaints of customers regarding our products and services as important customer feedback. We aim to improve customer satisfaction by improving our products and services after considering inquiries received by email and the opinions of customers heard at our Customer Consultation Office (for customers in Japan). The number of complaints received through the Customer Service Center has been declining over the past five years. Going forward, we will continue working to improve customer satisfaction by paying close attention to the opinions of our customers.

GS Yuasa Customer Consultation Office (accepts inquires and provides consultation on the GS Yuasa Group’s products)Toll free (in Japan): 0120-43-1211Hours: Weekdays 9:00 - 17:30 *Excludes Saturdays, Sundays, public holidays and Company holidays

*Valid only within Japan. Attended in the Japanese language only.

Quality Policy

Ensuring Quality and Safety through Company-wide Quality Management

Initiatives for Product Safety and Swift Dissemination of Information

Improving Employees’ Awareness of Quality

Promoting Greater Customer Satisfaction

GS Yuasa Corporation

GS Yuasa International Ltd.(including business companies)

Businesssegments

Businesssegments

Businesssegments

Quality Management Committee, Product Safety Management Committee

Improvement of front-line capabilities, kaizen team activities

GS Yuasa Quality Management System (ISO 9001)

Three-year quality improvement planQuality informationManagement of product safety items

Management of key quality itemsQuality management activitiesQuality education

0

500

1,000

1,500

2,000

Grade 1

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Grade 2 Grade 3 Grade 4

Quality Management Organization

Quality-related Education

2012 2013 2014 2015 2016 2012 2013 2014 2015 20160

2,000

4,000

6,000

8,000

10,000

12,000

14,000

0

200

400

600

800

1,000

1,200

Number of inquiries to the Customer Consultation Office

Number of customer complaints

It is “the overall process of the corporation, the industry and the on-site activity, implementing the designers’ determination into the products and the services for customer satisfaction, corporate profit and job security.”

Cumulative Total of Successful QC Examinees

Level Course on quality Rank

ApplicationB

asicE

ntry

New

recruitsFrom

year 2

QM

S

QC grade 3

7 new Q

C tools

Fundam

entals ofm

anagem

ent diag

rams

Samp

ling insp

ection

Reliab

ility

FME

A

FTA

Variation

Manag

ement-level and

mid

-level emp

loyees

QC story and 7 QC tools (Q7)

Why-why analysis

Fundamentalsof statistics

Fundamentals of quality

Estimation, examination

Quality engineering

Formulate policy on product safety activitiesDebate issues related to product safetyRespond by setting up a crisis managementheadquarters

Risk Management RulesGS Yuasa Quality Management System Regulations on management ofproduct safety

Flow Details of activities Process, mechanism

Feedb

ack on Information

Product SafetyManagement Committee

Product safety activities

Examine information andtake appropriate steps

Gather information onproducts and services

Formulate policies on product safety in businessdivisions Ensure product safety in product realization process

Examine information, decide on and implementappropriate steps and make continualimprovements (to prevent a reoccurrence)Manage and respond to crises concerning product-related accidents and quality-related claims Take steps to prevent harm and any additionalaccidents

Gather information on product safetyGather information on complaints, defects andaccidents for our products and services

Claims information system andCustomer Service CenterGS Yuasa websiteDaily quality report

Quality manual for business divisionsManual on crisis managementconcerning product-related accidentsand quality-related claims Manual for implementing productrecalls

Divisional policy bookQuality-related manual for businessdivisions

*Period: April to March of the following year



Providing Safe and Secure Products and Services

GS Yuasa Product Safety Action Flow

*‘Monozukuri’: Meaning ‘manufacturing’ is not just pointing to ‘craftsmanship’ in the narrow sense.

47 48


The GS Yuasa Group promotes fair employee selection, evaluation and training based on ability and performance. We prohibit discrimination in recruitment, personnel assessment and other employee circumstances, and we respect diversity irrespective of race, gender, sexuality,

nationality, place of birth, disability, religion or political opinion. At the same time, we conduct the necessary checks to make sure we don’t hire people under the legal working age or those without qualifications.

The GS Yuasa Group in Japan has adopted a “union shop system” and as a general rule all regular employees, aside from management, are members of the labor union. We pursue business based on mutual understanding achieved through labor union recommendations and active discussion

on domestic management policies, including work conditions and benefit programs. Through this relationship between labor and management, we are improving the objectivity and transparency of company management, while increasing the effectiveness of various initiatives.

Name of Labor-management consultative body Meeting frequency Content

Management council 4 times/year Company’s management policies, business conditions and status of business execution, etc.

Divisional committee Monthly Issues for the respective R&D and business divisions

Factory committee Monthly Issues in production divisions

Health and safety committee (statutory) Monthly Initiatives to prevent occupational accidents

Expert committee on work hours Monthly Checking the status of work hours and making improvements

Expert committee on future generations Twice/year Child-rearing and nursing care support

GS Yuasa is taking steps to promote women’s roles with the aim of developing women who can maximize their potential in whatever they do. We believe that providing the environment and opportunity for women’s roles will enable every woman to shine, which in turn will help us realize the “innovation and growth” stated in our philosophy. We aim to

create a company where every female employee shines in her own unique way by enhancing the desire for personal growth and increasing the style and number of roles through the synergistic effects of what we call the “three Ls.”

Providing Fair Selection and Opportunity

Creating a Pleasant Workplace through Labor and Management Working as One

Basic Rules on Forced Labor and Child Labor

Initiatives for Diversity (Promoting Women’s Roles)

Declaration

GS Yuasa will provide a diversity of roles for women that are bright, fun and affirming.

To promote the employment of people with disabilities, GS Yuasa offers a wide range of opportunities to people with disabilities, including in a company certified as a special subsidiary in December 2007. As of June 1, 2017, 2.51% of GS Yuasa’s employees were people with disabilities, which exceeds the legally mandated

employment rate of 2.0% as well as the previous fiscal year’s mark of 2.47%. We will continue to manage employment so that people with disabilities can put their skills and qualities to good use in an effort to maintain and improve a pleasant work environment.

Initiatives for Diversity (Employment of People with Disabilities)

Strengthen links inside the company

LinkWarmly embrace the different life

events

LifeLead women toward

opportunities for autonomy and

growth

Lead

The GS Yuasa Group is establishing the following basic rules on forced labor and child labor at overseas Group companies, in addition to Japan. We take immediate

corrective action upon discovering forced labor or child labor by a business partner.

We will neither force labor, nor employ children under the legal working age. Furthermore, we will not tolerate forced labor or child labor in any way.

Directly or indirectly, we will not be complicit in human rights abuse.

Prohibition of Forced Labor and Child Labor

Avoidance of complicity in human rights abuse

Objective 1

Objective 2

Objective 3

Steadily increase the percentage of women hired

Ensure that at least one woman a year takes part in next-generation select group training in order to boost the business skills of female employees

Support the strengthening of management abilities for supervisors in order to create an environment that encourages female employees to work to their potential

20% in FY 2016 30% in FY 2018

Action Plan Promoting Women’s Roles (April 1, 2016 to March 31, 2019)

The GS Yuasa Group believes that the rights of all people must be respected in order to realize our philosophy of contributing to people’s lives, society and the global environment.

The GS Yuasa Group respects diversity and works to maintain and improve a pleasant work environment. We are also committed to developing human resources with an emphasis on workplace conditions.

GS Yuasa Labor-Management Consultative Structure

GS Yuasa makes health and safety-related assessments based on an organizational framework led by health and safety committees in every business division and company. These assessments are guided by a health and safety management policy intended to create a corporate culture that ensures worker safety and health. To reduce the risk of occupational accidents, we identify the root causes of danger through risk assessments and by promoting the safe operation of equipment and machinery. To develop safety-conscious employees, in addition we appoint “safety trainers” who are vital for conducting safety-related

programs in the workplaces, including contract employees. We are working to entrench and improve safety through education on safety procedures (danger prediction, risk assessments, etc.). For work environment management and health management, we try to understand the workplace environment through assessments and by monitoring the impact of harmful substances on workers through special health diagnoses. The programs to make improvements are put in a PDCA cycle at major workplaces.

Occupational Health and Safety: Reducing the Risk of Accidents

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

GY missed work frequency rate*1 0.21 0.00 0.37 0.55 0.85Average frequency rate in manufacturing industry 1.00 1.05 1.00 1.06 1.15GY rate of intensity*2 0.00 0.00 0.00 0.01 0.01Average rate of intensity in manufacturing industry 0.10 0.10 0.09 0.06 0.07

*1 Missed work frequency rate is the number of people missing work per 1,000,000 work hours, calculated as: Missed work frequency rate = (Number of people missing work / Total number of work hours) x 1,000,000 *2 Rate of intensity is the number of lost days due to accidents per 1,000 work hours, calculated as: Rate of intensity = (Days missed / Total number of work hours) x (300/365) x 1,000

Respect for Human Rights Conservation and Improvement of Adequate Working Environment

49 50

TOPICS


At GS Yuasa, front-line workplaces are the engine that generates corporate value, and the lead players in those workplaces are our employees. We believe the best training is on-the-job training, so with a strong focus on management by objective we implement

training to nurture autonomous acting talent. In off-the-job settings, employees take part in communications training and voluntary training for career development and the improvement of management skills.

Aiming to be a workplace that protects the health of employees and enables them to work with peace of mind, GS Yuasa is striving to ensure the most appropriate work hours, based on cooperation between labor and management. An expert committee on work hours checks the condition of employees working long hours in addition to introducing and using an attendance management system and access control system to accurately understand and manage work hours.

We are taking steps to reduce labor hours for employees working long hours by providing consultation with an industrial physician in accordance with the law and through an advisory system (see “Work Style Reform” below) for supervisors. In addition, we provide compliance-related education with the themes of promoting understanding of work hour rules and appropriately managing work hours.

GS Yuasa formulated an action plan based on the Act on Advancement of Measures to Support Raising Next-Generation Children as a joint labor-management program. We implement activities to achieve the objectives of the plan, with the aim of creating an environment that makes it easy for employees to participate in childcare. We have also set up an in-house electronic message board called Supporting a Work

and Childcare Balance where we disseminate information on childcare-related systems to employees. To ensure that the childcare and nursing care support systems are being used, we are making every effort to increase awareness of the systems through training based on levels within the Company that include managers.

At GS Yuasa, labor and management are working as one to reduce long work hours and encourage employees to take annual paid leave with the aims of improving work efficiency and enhancing creativity at work by making sure employees stay physically and mentally healthy. Currently, we are strengthening initiatives to provide variation in work style by implementing the following:

setting one “no overtime” day a week; making it compulsory to take at least 10 days of leave a year; prohibiting two consecutive days of work on prescribed holidays; prohibiting overtime late at night (10 pm to 5 am); introducing a system to monitor employees working in excess of the standard hours; and providing advice to supervisors on how to deal with overtime issues.

Medium- to Long-Term Human Resource Development (Fostering Autonomous Acting Talent)

Promoting Work-Life Balance (Optimizing Work Hours)

Promoting Work-Life Balance (Supporting Work Alongside Childcare/Nursing Care)

Work Style Reform

FYFemales Males

Usage rate (%) Birth Users Return-to-

work rate (%)Usage rate

(%) Birth Users Return-to-work rate (%)

2014 100.0 5 5 100.0 0.0 99 0 –

2015 100.0 9 9 100.0 1.1 87 1 100.0

2016 100.0 7 7 88.9 3.0 66 2 100.0

FY

Long-termnursing care leave

Short-termnursing care leave

Number of users

Return-to-work rate (%)

Number of users Days of leave

2014 2 100.0 12 42.5

2015 1 100.0 7 26.5

2016 1 100.0 10 30

Percentage of Annual Paid Leave Taken (FY 2012 to 2015) Total Annual Work Hours (FY 2012 to 2016)

Percentage of Employees Taking Childcare LeaveNumber of Employees Taking Long-term Nursing Care Leave and Return-to-Work RateNumber of Employees Taking Short-term Nursing Care Leave and Total Number of Days on Leave

GS Yuasa Designated as a “Company with Excellent Health Management”

GS Yuasa and four Group companies were each designated as a Company with Excellent Health Management 2017 – White 500 in a program run by the Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi. The companies were recognized for (1) improving the health awareness of employees, (2) enhancing and expanding the health management system, and (3) enhancing, expanding and diversifying initiatives to promote health. Aiming to create a corporate culture that protects people’s safety and health, the GS Yuasa Group works with companies and health insurance associations to support the health of employees and their families.

0

400

800

1,200

1,600

2,000

2012 2013 2014 2015 2016

1,957 1,970 1,958 1,960 1,960

Average number of �xed hours worked annually by employees in Japan

(Hours)

Average number of overtime hours worked by employees in Japan

2012 2013 2014 2015

16.115.3

74.9

71.6

78.9

74.7

16.9

15.9

(Days) (%)

Average number of paid holidays taken by employees in JapanPercentage of total available paid holidays taken by employees

14.5

15.0

15.5

16.0

16.5

17.0

6668707274767880

Behavior NormsChallenge, judge, comply, cooperate

Self-reporting system

Management by Objective

Integrate vision vectors

Growth

Display of results Training goals, plan setting

Plan

Training goals, training plan

(1) Set a subjective objective(2) Complete an independent objective

Employees

Strive for personal growthPlan, use opportunities for personalgrowth

(1) Presentation of principles and the objective(2) Bring views into line with one another

Superior

Company (1) Make employees aware of career development(2) Create a framework that self-starters can use well

Communication

Instruction, support

ObjectiveP

CDA

Rank Personal DevelopmentBusiness Skills

New divisionmanager training

Logicalcommunication

training

Global Human Resource Development

Business Englishtraining

(selected group)

English emailwriting training

Skills training(external)

Online languagelessons

TOEIC®

Distance learning,online courses

Japanese BusinessLaw Examination®

(external)

New managertraining

New leader training

Mentor training

Career advancementtraining

(sixth year)

Skills improvementtraining

(third year)

New employee follow-up trainingNew employee training

Desired outcome

Business English training (selected group)

Overseas practical training program(develop candidates for overseas assignment)

Pre-overseas assignment training(language, management skills, etc.)

Train subordinates according to planEncourage subordinates to displaytheir abilities, assess fairly and justly

Training System

Notes: Employees do not include personnel on leave or those transferred to workplaces outside Japan.

The average number of fixed hours was calculated as fixed working hours minus hours absent from work due to days off, arriving late to work or leaving work early, etc.

Period: January to December

Notes: Employees do not include personnel on leave or those transferred to workplaces outside Japan.

The years shown in this chart refer to September in the specified year to August of the following year, based on a calculation method set by Japan’s Ministry of Health, Labour and Welfare.

TOPICS

GS Yuasa Awarded Kurumin Mark

GS Yuasa attained the Kurumin Mark certification in 2017. The Kurumin Mark is a symbol granted by Japan’s Ministry of Health, Labour and Welfare to organizations that meet certain standards related to formulating action plans and attaining their goals based on the Act on Advancement of Measures to Support Raising Next-Generation Children. GS Yuasa aims to be a company that continually supports childrearing by establishing an environment where employees can strike a good balance between work and childcare, and then further enrich these results.

Conservation and Improvement of Adequate Working Environment

Basics of Human Resource Development

51 52

The GS Yuasa Group, together with the supply chain, will contribute to creating a sustainable society.


The GS Yuasa Group provides education and guidance on compliance and CSR (corporate social responsibility) to business partners, checks the way they manage harmful substances in products, responds to conflict minerals via surveys and encourages green procurement. We also started activities to help

our business partners improve results as well as study sessions and presentations on how to boost quality. Through better partnerships in the supply chain, we are improving the results of both our business partners and the GS Yuasa Group, while decreasing business risk.

GS Yuasa holds briefing sessions on production run by management as well as social gatherings every year to increase our major business partners’ understanding of the GS Yuasa Group’s management policies, annual business policy and basic procurement policy. This also deepens mutual understanding

and strengthens relationships of trust with these business partners. In addition, we give awards to business partners who have made outstanding contributions to quality, price and the supply system over the previous fiscal year.

To promote activities that raise quality and enhance health and safety, including for business partners who supply parts and raw materials, the GS Yuasa Group provides guidance on quality reflecting the needs of our business partners as well as health and safety patrols, if required. In programs that raise quality, we share with business partners the target values and the results of quality defect analysis of products supplied to the Group and work to improve the quality of these items along with our

partners. Target values for FY 2017 were 27 cases (GS Yuasa International Ltd. (GY)) and 1.17% (GS Yuasa Technology Ltd. (GYT)). We believe that these activities create strong partnerships in the supply chain and are important to ensure the quality of products used by customers as well as the health and safety of our business partners.

Every year, the GS Yuasa Group’s domestic production division analyses how business partners deal with conflict minerals*1 through surveys using EICC and GeSI template forms.*2 By checking throughout the supply chain, right back to refining, we can verify that none of our suppliers contribute to conflict

minerals. The Group’s production division overseas also continually investigates conflict minerals. In fiscal 2016, we formulated a policy to deal with these minerals and distributed it to our overseas affiliates.

We will never procure or use conflict minerals. If it is discovered that conflict minerals have been procured or used, we will contact the overseas site and supplier and take steps to avoid using them again. We will continually investigate the use of conflict minerals. In cases of possible procurement and use of conflict minerals, when information on the purchasing source has not been disclosed, we will work to clarify information on the purchasing source.

The GS Yuasa Group in Japan makes the following requests of business partners based on our Green Procurement Criteria.

For 2. above, we ask our business partners to examine substances using Chemical Substance Management Guidelines, which comply with international laws and regulations including EU directives (REACH, RoHS, etc.), and to test individual chemical substances as specified by customer needs. GS Yuasa evaluates the appropriateness of stipulations to business partners concerning green procurement by checking and auditing the status of their response. By prioritizing those business partners that supply goods that conform to green procurement standards, we are reducing the environmental burden, including the burden within the supply chain.

The GS Yuasa Group assesses business partners using a QCDE approach (quality, cost, delivery and environment). Going forward, we will add elements of CSR to these assessments to ensure that our social responsibility is being met throughout the supply chain. To achieve this goal, we will share the GS Yuasa Group’s CSR Procurement Guidelines with our business partners and work to promote CSR procurement based on mutual

cooperation. For new transactions, we will prioritize business partners that understand and accept the Group’s CSR Policy. In briefing sessions on production in fiscal 2017, we are asking our business partners to strengthen their CSR initiatives and to cooperate with us on CSR-based procurement, and we plan to identify CSR risk in the supply chain by analyzing survey and assessment results.

Major Procurement Programs

Briefing Sessions on Production

Ensuring Quality and Health/Safety

Response to Conflict Minerals

Green Procurement

Promoting CSR-based Procurement

0

10

20

30

40

50

0.0

0.5

1.0

1.5

2.0

2.5

2012 2013 2014 2015 2016

(%)

1.75

35 37

2.22

1.55

32

1.33

35

1.52

39

Incidence of Quality Defects

Guidance on Quality for Business Partners

We intend to boost the results of our business partners and the GS Yuasa Group by working to create better partnerships based on mutual understanding and relationships of trust.

Basic Procurement Policy

Policy on Conflict Minerals – Overview

*1. Conflict minerals are tantalum, tin, tungsten, gold and their derivatives used as resources by antigovernment armed groups who commit inhumane acts in the Democratic Republic of the Congo and neighboring countries.

*2. Templates issued by the Electronic Industry Citizenship Coalition (EICC) and Global e-Sustainability Initiative (GeSI), organizations working to tackling the problem of conflict minerals, to check whether conflict minerals have been used or not.

Introduction of Environmental Management System by Business Partners (FY 2016, transaction amount base)

Yet to introduce 6%Self-declared 1%

Third-partycerti�cation

93%

Requirements for Business Partners

1. Operation of an environmental management system

2. Examination of chemical substances contained in items being supplied

3. Checking the legality of cutting down certain trees (logging)

4. Programs to identify and reduce CO2 emissions


Cases of quality defects (GY; RHS)

Rate of quality defects (GYT; LHS)

Promoting Socially Responsibility in the Supply Chain

53 54

The GS Yuasa Group works to protect the environment and make constant improvements that consider the impact on the global environment of business operations, products and services.

We carefully evaluate the impact on the environment of our business activities, products and services, and we work to save energy, reduce resources and waste, and recycle resources as a way to protect the environment, which includes preventing pollution. By making continual improvements in these areas, we aim to improve our environmental performance.

We promote the development and design of products that protect the environment by considering how to reduce the environmental burden at every stage of the product life cycle, including acquiring raw materials, development and design, production, transportation, use and disposal.

We work to decrease environmental burdens with our business partners throughout our entire supply chain, including materials procurement and physical distribution.

We have created environmental management systems according to ISO 14001 standards and have enacted environmental policies at each of our offices based on these fundamental policies. We also advance our environmental management activities by setting related objectives.

We abide by all laws, ordinances, agreements, and regulations related to the environment, as well as other requirements agreed on by the Group. We also make voluntary management standards according to these as necessary to promote environmental conservation.

We appropriately execute revisions based on environmental audits and management reviews to maintain and improve our environmental management systems continuously.

Through education, training, and other environmental awareness efforts, we promote the environmental awareness of all Group employees, and we contribute to society through our environmental preservation activities.

We seek to achieve good communications with our stakeholders and with society as a whole by appropriately providing information related to the environment, including our fundamental environmental policy.

At the GS Yuasa Group, we set conservation of the global environment as one of our most important tasks, and we contribute to the creation of a sustainable society through the development, manufacture, and sale of batteries, which are a form of clean energy, power supply systems, and lighting equipment.

The Fundamental Environmental Policy of the GS Yuasa Group was established to serve as a guideline for environmental management. In our domestic offices, we developed an organizational environmental management system and have been promoting initiatives to implement our environmental policy, which is based on our overarching environmental policy.

We have developed mid-term plans for important issues related to our environmental policy in order to contribute to the emergence of a sustainable society. We continue to manage the status of implementation of these initiatives.


ObjectivesFY 2016 results

1

We will reduce CO2 emission intensity from production in fiscal 2018 by at least 5%, relative to fiscal 2013.

CO2 emission intensity from production was at the same level as fiscal 2013 (13.0 g CO2/Wh).

We will reduce energy consumption intensity in logistics in fiscal 2018 by at least 5%, relative to fiscal 2013.

Energy consumption intensity in logistics was reduced by 10% relative to fiscal 2013 (0.046 L / ton-km).

We will create and operate efficient energy management systems.We carried out energy conservation programs using our environmental management systems.

We will reduce the rate of production errors and defective products (consistency with ISO 9001).

The lead scrap rate was 3%.

We will reduce the rate of lead scrap to less than 2% in fiscal 2018.

We will reduce the amount of wastewater during production in fiscal 2018 by at least 77%, relative to fiscal 2003.

The amount of wastewater was reduced by 61% relative to fiscal 2003 (874,000 m3).

In fiscal 2018, we will promote the correct ways of disposing and recycling 100% of used industrial products under a wide area certification system.

The percentage of used industrial products correctly disposed of or recycled under the wide area certification system was 99.9%.

We will create a resource recycling system for next-generation lithium-ion batteries.

We looked into a recovery method for lithium-ion batteries used in next-generation vehicles.

2 We will work to popularize design for the environment (DfE) products.

We promoted the development and design of products using the GS Yuasa Design for the Environment (DfE) Guidelines formulated in October 2005.

3

We will support the acquisition and advancement of environmental management system certification by business partners.

93% of all transactions were made with business partners that have acquired environmental management system certifications.

We will monitor the flow of materials subject to the GS Yuasa Group Chemical Management Guidelines.

In coordination with green procurement, we thoroughly revamped the management of chemical substances contained in products and complied with Japanese and international regulations on the allowable amounts.

4 We will comprehensively manage environmental risk with our environmental management systems throughout the entire product life cycle.

We managed environmental risk using our own environmental management systems.

5 We will set voluntary management standards that are stricter than environmental laws and regulations, and we will make improvements to environmental management technologies.

There were no instances of emergencies directly related to environmental pollution and no instances of environment-related lawsuits, punitive fines or administrative fines.

6 We will make continual improvements to our environmental management systems with the aim of producing effective environmental management.

We improved our environmental management systems by addressing the issues identified through periodic internal and external audits.

7 We will actively and continually take part in environmental conservation.

We undertook environmental programs and initiatives, which included cleaning the areas around our offices.

8We will expand the scope of environmental information disclosure through the Environmental & Social Report and ensure social appraisal is fed back to our environmental management activities.

We conducted external communications to reach a wider range of stakeholders, which included publishing the Environmental & Social Report.

Energy conservation and reduction of greenhouse gases

Resource conservation

Resource recycling

Environmentally considered products

Promotion of green procurement

Management of chemical substances

Thorough management of environmental risk

Legal compliance

Maintenance and continuous improvement of environmental management systems

Social contribution

Communication about the environment

Key items

Third Five-Year Environmental Plan (FY 2014 to FY 2018) and FY 2016 Results Sites covered: GS Yuasa International Ltd. (Kyoto, Osadano, Gunma and Odawara Plants)

Action Agenda

Fundamental Philosophy

1

2

3

4

5

6

7

8

Fundamental Environmental Policy

GS Yuasa Group Environmental Policy

Protecting the Global Environment

55 56


Our business operations consume energy, water, raw materials, and other resources while generating waste water, waste products, greenhouse gases, and other materials. We are well aware of the impact of our business operations on the environment. At the same time, we are striving to reduce waste discharge and to use resources efficiently. In addition, we consider environmental impacts from the

product development and design stages through to the stages of material procurement, manufacture, transport, use, and disposal. Thus, we strive to reduce environmental burdens throughout the product life cycle by, for example, developing environmentally considered products and promoting the recycling of discarded products.

Flow of Materials in the Product Life Cycle Management of CO2 Emissions at Production Sites Worldwide

INPUT Productlife cycle

OUTPUT

Developmentand design

Procurement

Production

(6 sites in Japan)

Physicaldistribution

(Logistics operators)

Use

(Customers)

Recycling

Waste collectionagencies

Resourcerecycling

operations

8,726t

Amount of recycling

Waste plates,batteries, andlead paste4,047

Other 228

Lithium-ion batteries 1,171Waste acids, alkaline substances 952

Sludge 689

Waste paper and garbage 460Metal scraps 439Waste plastic 434

Wood scraps 306

96t

Amount of �nal disposal

Sludge42

Waste plastic 11

Waste paper and garbage 26

Other 10Woodscraps 7

Amounts of energyused in physical distribution

3,079 kL

Amount of CO2 emissions inphysical distribution

7,933 t-CO2

128,237t

Amounts of main materials used*Main materials (lead, sulfuric acid, and plastic)

Recycled materials42,937

Newmaterials85,300

1,391,797m3

Amounts of water used

Publicwater supply236,783

Undergroundwater440,073

Water forindustrial use714,941

Amounts of energy used in manufacturing(crude oil conversion)

LPG964

City gas10,699

Electricity63,769

Keroseneand gasoline12

75,444kL

1,134,686m3

Amount of waste water

Publicwaters474,611

Sewagedisposal660,075

91,633kg

Amount of chemical emissions (air, water, waste)

Nickel compounds10,802

Manganese andits compounds35,705

Lead compounds 31,871

Other 54

Cobalt andits compounds10,800

Dichloromethane2,401

8,823t

Amount of waste discharged

Waste plates, batteries,and lead paste4,047

Other 238

Lithium-ion batteries 1,171Waste acids, alkalinesubstances 952

Sludge 731

Waste paperand garbage 487

Waste plastic 445Metal scraps 439Wood scraps 313

Amount of CO2 emissions in manufacturingLPG2,206

Electricity131,395

Keroseneand gasoline29

City gas20,679

154,309t-CO2

Volume of used productsrecovered4,963 t

Amount of recycling4,107 t

( )

( )

United Kingdom9,398 Turkey

18,297

Pakistan23,533

India16,609

Malaysia4,443 Australia

12,237

United States8,269

Thailand49,546

China104,452

Indonesia131,020

Vietnam11,586

Taiwan85,821

Japan154,309

The GS Yuasa Group undertakes global initiatives to identify and reduce CO2 emissions from production around the world. The table below shows CO2 emissions for fiscal 2016 at major production sites worldwide. 92% of these production

sites have obtained ISO 14001 certification and, to promote reductions in CO2 emissions, are using an environmental management system that complies with international standards and regulations.

Response to Carbon Disclosure Project (CDP) GS Yuasa responds to the CDP Climate Change Questionnaire, a project requesting companies to release information on their climate change strategy and greenhouse gas emissions (only information we collect in Japan is disclosed). We use the results of CDP evaluations and promote initiatives to mitigate and adapt to climate change.

Country Production site CO2 emissions

Japan

GS Yuasa International Ltd. (Kyoto, Osadano, Gunma and Odawara Plants) 118,244

Lithium Energy Japan 31,416

GS Ibaraki Works, Ltd. 4,649

China

Tianjin GS Battery Co., Ltd. 41,949

Yuasa Battery (Shunde) Co., Ltd. 28,565

Yuasa Battery (Guangdong) Co., Ltd. 20,850

GS Battery (China) Co., Ltd. 7,306

Tianjin Yuasa Batteries Co., Ltd. 5,781

TaiwanTaiwan Yuasa Battery Co., Ltd. 52,061

GS Battery Taiwan Co., Ltd. 33,759

Vietnam GS Battery (Vietnam) Co., Ltd. 11,586

Malaysia GS Yuasa Battery Malaysia Sdn. Bhd. 4,443

Country Production site CO2 emissions

Indonesia

PT. Yuasa Battery Indonesia 28,580

PT. GS Battery 63,819

PT. Trimitra Baterai Prakasa 38,622

Thailand

Yuasa Battery (Thailand) Pub. Co., Ltd. 12,983

Siam GS Battery Co., Ltd. 30,014

GS Yuasa Siam Industry Ltd. 6,549

India Tata AutoComp GY Batteries Private Limited 16,609

Pakistan Atlas Battery Ltd. 23,533

Turkey Inci GS Yuasa Aku Sanayi ve Ticaret Anonim Sirketi 18,297

United Kingdom GS Yuasa Battery Manufacturing UK Ltd. 9,398

United States Yuasa Battery, Inc. 8,269

Australia Century Yuasa Batteries Pty. Ltd. 12,237

CO2 Emissions at Production Sites by Country (Unit: t-CO2)

CO2 emissions by country (Unit: t-CO2)

Total CO2 emissions 629,520

The CO2 conversion factor for power outside Japan uses the coefficient specified under the GHG Protocol for each country.


Remarks(1) Data came from six sites in Japan in fiscal 2016: GS Yuasa International Ltd. (Kyoto, Osadano, Gunma and Odawara Plants), Lithium Energy Japan and GS Ibaraki Works, Ltd. (2) Figures for energy consumption and CO2 emissions during transportation are solely from GS Yuasa International Ltd. (3) Figures for the volume of used products recovered and resources recycled are solely from industrial batteries and power sources. (4) The conversion factor for calculating CO2 emissions for power consumption uses the CO2 emissions intensity data issued by the Federation of Electric Power Companies of Japan.

57 58

Recycling System for Used Products (Wide Area Certification System)

The GS Yuasa Group, together with the supply chain, is working to lessen the Group’s environmental burden not only at the manufacturing stage but also throughout the product life cycle.

We are committed to conducting management that does not expose us to environmental risk.


The GS Yuasa Group’s products have some impact on the environment during every stage of the product life cycle, from procurement and manufacturing to transportation, use and disposal. For this reason, we are committed to designing products based on the GS Yuasa Design for the Environment Guidelines with the aim of reducing the environmental burden throughout the product life cycle, which includes the consumption of resources, the emission of greenhouse gases, and waste. The guidelines cover design that considers the materials used in the product, the 3Rs (reduce, reuse, recycle), ease of disassembly, labeling, energy conservation and packaging. The GS Yuasa Group

The GS Yuasa Group employs different types of environmental education to maintain and improve environmental management systems.

In addition, we regularly provide training to avoid exposure to environmental risk.

Employee education In every division, we provide education to all employees

to build awareness of their role in achieving the environmental policy.

Education for new recruits New recruits are made aware of the GS Yuasa Group’s basic

philosophy on environmental management.

In every business location, we work to prevent environmental pollution through operational management based on voluntary standards that are stricter than regulatory standards based on environmental laws, regional ordinances and agreements. In working to mitigate the risk of environmental pollution, we take action in operations where there is the possibility of water contamination, air pollution or soil contamination. This includes tangible actions: increasing the visibility of operations and preventing spills as well as using equipment to remove noxious substances and intangible measures, such as equipment inspections, monitoring, measuring and enhancing operating procedures. Also, we have identified the following potential emergency situations that could have a serious impact on

The GS Yuasa Group regularly reviews the environmental laws and regulations that must be obeyed, and ensures, through monitoring, that operations are managed in a way that is legally compliant. Further, business is conducted in compliance with environmental laws and regulations since we use hazardous

A wide-area certification system aims to involve the manufacturers of a product in the product’s recycling and disposal once it reaches the end of its useful life. These systems make possible more efficient recycling and provide feedback on product design leading to easier disposal and reuse, while ensuring that discarded goods are disposed of properly. In January 2008, the GS Yuasa Group in Japan acquired wide-area certification from the Ministry of the Environment for industrial batteries and power supplies, and in January 2009 started accepting orders in earnest for a recycling system based on this certification. In FY 2010 and FY 2013 we broadened the range of eligible products, and in FY 2011 we reviewed the operating rules related to small

promotes the development and design of environmentally considered products through design for the environment (DfE) by using these guidelines while, at the same time, maintaining and improving the performance of products.

the environment, and we are taking steps to prevent these situations from occurring. Spills of liquid waste from outside tanks, pipelines, etc. and underground seepage that exceeds accepted standards

Discharges into the air of soot and smoke from melting furnaces, dust collectors and dehydrators that exceeds accepted standards

To make sure we are fully prepared for an emergency, we regularly hold emergency response training to help minimize damage. There were no instances of emergencies directly related to environmental pollution at any of our business locations in fiscal 2016.

substances, such as lead, in our products and we must obey the laws and regulations related to the operation of recycling systems for used products. There was no litigation and there were no punitive fines or administrative fines for nonadherence to environmental laws or regulations in fiscal 2016.

products, resulting in an improvement of our secure, effective disposal system for discarded goods. In FY 2016, the amount of discarded goods we processed under the wide-area certification system reached 4,963 tons. This figure was 99.9% of the discarded products the GS Yuasa Group in Japan collected in the same period. As far as industrial batteries for the domestic Group are concerned, the wide-area certification system is now firmly established. In the future, we will promote even more effective operation of the wide-area certification system to improve customer service as well as to recycle and properly dispose of post-use products.

0

1,000

2,000

3,000

4,000

5,000

6,000

0

20

40

60

80

100

FYE Mar.2013

FYE Mar.2014

FYE Mar.2015

FYE Mar.2016

FYE Mar.2017

FYE Mar.2013

FYE Mar.2014

FYE Mar.2015

FYE Mar.2016

FYE Mar.2017

(t) (%)

4,495

97.2 95.5 99.3 99.8 99.9

4,703 4,546

5,2094,963

0

1,000

2,000

3,000

4,000

5,000

6,000

0

20

40

60

80

100

FYE Mar.2013

FYE Mar.2014

FYE Mar.2015

FYE Mar.2016

FYE Mar.2017

FYE Mar.2013

FYE Mar.2014

FYE Mar.2015

FYE Mar.2016

FYE Mar.2017

(t) (%)

4,495

97.2 95.5 99.3 99.8 99.9

4,703 4,546

5,2094,963

Amounts Handled under the Wide-Area Certification System (Industrial Batteries, Power Supplies)

Application Rate of the Wide-Area Certification System (Industrial Batteries, Power Supplies)

General Environmental Education

Training of internal environmental auditors At every business location, we train internal environmental

auditors and provide them with education to boost their skills to continually improve our environmental management systems.

Emergency response training In every division, we regularly provide training on

responses to potential emergencies to all employees working in operations that have significant potential impact on the environment.

Specialized Environmental Education

Energy conservation

Volume reduction

Recyclability

Ease of disassembly

Ease of separation and processing

Safety and environmental conservation

Material selection

Ease of maintenance

Energy efficiency

Reusability (lifecycle extension)

Environmental Assessment Items

1 6

2 7

3 8

4 9

5 10

Design for the Environment (DfE) Environmental Education including Emergency Response Training

Preventing Exposure to Compliance Risk and Environmental Pollution Risk

Comprehensive Compliance Management


59

GS Yuasa Eco Art Contest for Elementary School Children

Regional Contributions at GS Yuasa Siam Industry Ltd.

We contribute to local communities through our business activities.

CSR

A photovoltaic generation system using the GS Yuasa’s lithium-ion batteries has been in operation at the Kushiro Town Toritoushi Wildland Photovoltaic Generation Plant in Hokkaido since April 2017. When generating photovoltaic power, changes in natural conditions, such as sunshine hours and temperature, can lead to significant fluctuations in the power generated, while a major increase in the photovoltaic power load could reduce the quality of the system’s power in terms of both voltage and frequency. For this reason, in Hokkaido, it is necessary to reduce output fluctuations by installing storage battery systems when connecting photovoltaic power generation to power systems. The GS Yuasa Group’s lithium-ion battery system was installed at this plant as a key device to reduce power output fluctuations.

The Group continues to promote the use of high-performance lithium-ion battery systems in power generation and is aiming to contribute to creating sustainable local communities using renewable energy.

Since FY 2009, GS Yuasa Battery Ltd. has sponsored the GS Yuasa Eco Art Contest for Elementary School Children to give the pupils, who will become the young citizens in the future, an opportunity to express their thoughts on the global environment. This contest program provides the opportunity for children and their families to come together and think about the environment. We plan to continue holding this event in the future.

GS Yuasa Siam Industry Ltd. (GYSI), our group companies in Thailand, promotes local activities with a focus on community interaction. In the past, the company implemented a number of programs that contributed to the local community. These programs include cleanups and fundraising for local elementary schools and temples, running an ice cream stall at an event for children (second Saturday in January), installing lights at an elementary school after shifting to LED lighting, holding factory tours for school students and sponsoring a long-distance race at an industrial park. In 2016, the company was given the CSR-DIW Award* by the Thai government in recognition of these activities. As a company rooted in the local community, GYSI also promotes interaction through education for local citizens that goes beyond donations and volunteering.

Industrial lithium-ion battery module LIM50EN series

Overall view of Kushiro Toritoushi Wildland Photovoltaic Generation Plant

Plaque for the CSR-DIW Award

Gold award-winning entry

*The CSR-DIW Award is given by the Department of Industrial Works (DIW) in Thailand to companies that promote exceptional business activities that contribute to sustainable development and the local community.

Participating in the construction of a dam (as a measure against flash floods during the monsoon season)

GYSI factory tour for local junior high students

Stable Supply of Photovoltaic Generation Systems

Building Better Relationships with Local Communities

Documents

GS YUASA Our CSR management, in which we seek to